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Briefly describe what the custodian does.

09/11/2020 Client: papadok01 Deadline: 3 days

P7-30A
Accounting, 9e
P7-30A Accounting for petty cash transactions
LO 9 [20-30 minutes]
Students please fill-in areas that are shaded
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Date:
On June 1, Bash Salad Dressings creates a petty cash fund with an imprest balance
of $450. During June, Al Franklin, the fund custodian, signs the following petty
cash tickets:
Petty Cash Ticket No. Item Amount
101 Office supplies $ 15
102 Cab fare for executive 10
103 Delivery of package across town 20
104 Dinner money for city manager 35
to entertain the mayor
105 Inventory 65
On June 30, prior to replenishment, the fund contains these tickets plus cash of
$310. The accounts affected by petty cash payments are Office supplies expense,
Travel expense, Delivery expense, Entertainment expense, and Inventory.
Requirements
1. Explain the characteristics and the internal control features of an imprest fund.
2. On June 30, how much cash should the petty cash fund hold before it is replenished?
3. Journalize all required entries to create the fund and replenish it. Include
explanations.
4. Make the July 1 entry to increase the fund balance to $475. Include an explanation,
and briefly describe what the custodian does.
Test Your Knowledge
P7-30A
Req. 1
Req. 2
Req. 3
Journal
DATE ACCOUNTS AND EXPLANATIONS DEBIT CREDIT
June 1
To open the petty cash fund.
June 30
To replenish the petty cash fund
Req. 4
Journal
DATE ACCOUNTS AND EXPLANATIONS DEBIT CREDIT
July 1
To increase the petty cash fund.
&LJennie Mitchell&RApril 23, 2011
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